Amazon

Amazon.com, Inc. is a Seattle-based multinational company focusing on e-commerce, cloud computing , digital streaming and artificial intelligence. Together with Google, Apple , and Microsoft, it is considered one of the Big Four technology firms. Traded as NASDAQ: AMZN, Amazon has been named as the world’s valuable brand.

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How to Trade Amazon Stock?
On Wall Street, the general consensus is that Amazon is a high value stock with very good prospects for the future. Still, stock prices never move in a linear manner, even with Amazon stock price. Here are the factors to consider when trading Amazon stock:

Tariffs and Trade agreements
Amazon.com operates as a marketplace where most sellers operate using a drop shipping model or Amazon FBA (Fulfilment by Amazon) to make their products available in the North American market. Many sellers, acquire or have their products manufactured in cheaper jurisdictions, such as China. They then ship them to the US to make them available for sale online. It is a fairly straightforward model, but changes in tariffs and trade agreements between the major nations can impact the sellers’ costs and consequently, their margins. If it results in losses for sellers, Amazon.com may incur a hit on their revenues.

Competitor’s Performance
Amazon operates in high growth industries, and this naturally attracts high profile competitors. In the ecommerce segment, Amazon.com faces competition from companies such as Alibaba, Otto, eBay and Flipkart. Its heavy presence in retail also attracts competition from dominant offline retailers such as Walmart, Costco, Target, Kroger and Home Depot. In the online media streaming segment, Amazon Prime Video faces competition from Netflix and iTunes and in the enterprise cloud hosting sector, giants like Microsoft and . These are all strong competitors and it is always sensible to assess their performance in relation to that of Amazon.

New Product/Services Rollout
As stated earlier, Amazon is a highly innovative company with the funds and capabilities to launch new products, or even make new acquisitions frequently. It is important to assess how these acquisitions will impact on its bottom line, both in the short term and in the long run. In recent years, consumer electronics have been performing admirably, but investors should also pay attention to moon-shot projects that could have an even bigger impact on the stock in the future.

Periodical Earnings Reports
Amazon’s fiscal year goes in tandem with the calendar, which means that it ends on December 31. It is important to get a look at its quarterly earnings reports so as to establish how the different business units are performing, as well as get a global view of future business prospects. While many traditional investors would want to take a long-term view on stocks, it is vital to watch these mentioned factors with a short and medium-term focus in mind. This can help investors to pick out high quality trading opportunities with the chance of earning profits within a shorter period of time too.

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